Fallout from mad cow scare hopefully short-lived

Mad cow disease is a guaranteed Page 1 above-the-fold story. However, newspaper headline type was noticeably smaller the second day after the discovery of Bovine Spongiform Encephalopathy (BSE) in a dead dairy cow at a central California rendering plant.

There are 1.8 million dairy cows in California and finding one positive for BSE is like finding a needle in haystack. As a consumer I am thrilled the needle was found. It proves the nation’s animal health monitoring system works.

The most common way cattle get mad cow is from contaminated feed. Fortunately, in 1997 the federal government eliminated that pathway when it banned the use of animal proteins in cattle feed. This pathway to BSE devastated British herds in the 1990s.

Guy Loneragan, epidemiologist and professor of food safety and public health and at Texas Tech University, told BEEF magazine “Worldwide, there have been 180,000 classical cases of BSE, mostly in the UK, with 60 cases of the atypical.”

There have been only 4 BSE cases in the U.S. This one is the first since 2006. Three of the four, including the latest one, were a rare atypical strain of BSE. How atypical mad cow develops in cows is still a mystery, although scientists believe it may develop spontaneously. It could be genetic.

According to USDA, the cow came from a Tulare County dairy. Federal authorities are thoroughly investigating the animal’s history.

This story will play out in the news over the next days, but I suspect it will fade since most experts are emphasizing that meat from the animal never reached the food chain, and there is no threat to the public.

However, the impact in the agricultural community could be significant. First it was a dairy cow and the dairy industry is struggling right now with milk prices generally below cost of production. Although mad cow disease is not transmitted in milk, the BSE find could have a big impact in the state’s milksheds and well beyond.

At least 70 percent of the steers on feed in California are Holstein. The percentage is higher in Arizona feedyards. If this mad cow thing lingers in the news and beef prices tumble, the impact on the dairy industry could be devastating with the loss of income from calf sales.

If dairies lose more money, what they can pay for feedstuffs like commodities would also be in jeopardy.

An indication of how it might affect dairy calf sales: Beef futures took a hard tumble the day after the BSE find was announced. However, they rebounded the next day and recovered after about half the day before loss. Sales at one Central Valley livestock barn did not experience a significant drop in prices during the first few days after the find.

Two South Korean beef importers did halt the sale of meat. One, however, recanted later. The South Korean government has not banned U.S. beef imports. Indonesia suspended some beef imports after the mad cow discovery, but pledged to rescind the order with assurances from the U.S. that the situation was under control.

However, no one country has halted U.S. beef imports.

As with any food quality scare, the fallout is usually worse than the incident. Hopefully, the consequences of this mad cow crisis will be short-lived.